Oman uncovers spy network but UAE denies any links

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State news agency in Oman said that authorities in Oman announced they have uncovered a network of spies working for the United Arab Emirates.

The alleged agents for the UAE are said to have spied on the Omani government and military.

The UAE government denies any knowledge of - or link with - such a network, according to its news agency.

No further details were officially given.

January 28, 2011

Analysis and Forecast: Increasing Risk

The busting of an alleged UAE spy cell in Oman is a most serious development. Although the official announcement by Oman did not carry specific details, Political Capital sources confirm that over 30 arrests took place in November and December 2010. They were followed by an overhaul of the organizational structure of the Omani security forces.

The likely explanation is two fold:

The UAE is concerned about Oman's relations with Iran. Oman's population belongs to the Ibadhi sect of Islam, which is neither Sunni nor Shiite. They are deemed however closer to Shiites than the rest of the mainly Sunni UAE. The Sultan of Oman unusually reiterated the importance of his country's relations with Iran, around the time of arrests. Oman and Iran are on opposite sides of the Straits of Hormuz, through which 40 percent of global oil supplies pass. Both those reasons make Oman's relations with Iran strategically important. The UAE may have felt uneasy about this.

The UAE may be concerned with succession in Oman. The Sultan, in his 70's, does not have an heir and it is not clear who would succeed him. The succession could lead to internal conflicts within the Omani royal family and due to Oman's strategic importance, the UAE would want to have a say.

Although this has been resolved, there may be issue with border demarcation that the UAE may not be comfortable about, especially the Omani enclaves in UAE territories.

It is understood that senior UAE officials failed to resolve the situation with the Omanis, despite top level intervention. The arrests are confirmation that inter-GCC defense issues are not aligned and that both countries may be meddling in each others succession issues. The overall assessment is that strained relations, on this highly sensitive front, indicate an overall increase of risk in both countries.